LINDE PLC

Linde is a dominant, wide-moat industrial-gas franchise with top-decile margins, returns and cash generation.

Strengths

• Top-percentile operating margin (26%), OCF margin (30%) and ROE (18%); net margin 20% (90th pct)
• $5.1B FCF (98th pct), durable on-site/pass-through contracts and global scale across 80+ countries

Risks

• Modest revenue growth (3%, 37th pct) and current ratio below 1.0 (18th pct)
• Large goodwill (~$28B) from the merger carries impairment risk

Notable findings

• Weak liquidityCurrent ratio 0.88 (<1)
• Customer concentration~52% of revenue from one customer/distributor — 2% and 51
• Strong balance sheetStrong balance sheet — $5.1B cash & investments
• Buying back stockNet buyback — share count -3%/yr over 4y
• China exposureLinde has substantial international operations which are subject to risks including devaluations in currency exchange rates, transportation delays and interruptions, political and economic instability